Chronic Poverty and Development Policy in Sri Lanka: Overview Study, CPRC Working Paper No. 9,

Abstract

Sri Lanka is well known for achieving high levels of human development at relatively low levels of GDP per capita. Successive governments have invested heavily in education, health and welfare programmes, and this has been associated with the country achieving levels of life expectancy and literacy that are comparable to industrial countries. However, these human development achievements and high levels of public expenditure on social welfare, have not eradicated deprivation. Factors contributing to the prevailing poverty levels include inadequate economic growth; low economic benefit trickle down to the poor; high state expenses on defence due to the prevailing secessionist conflict in the North; and inefficient allocation of resources to the deprived populations and regions in the country, based in part on a lack of differentiation of the poor.

In the absence of systematic information on the chronically poor, the present study attempts to capture chronic poverty in Sri Lanka by examining general information on poverty and drawing conclusions on those who are likely to be among the chronically poor. Certain population groups that are likely to experience poverty over many years (or all their lives) are examined in this review. These include the internally displaced persons from the conflict, disabled, elderly, street children, employed children, female headed households and youth.

The poor are also examined using a 'livelihood' framework. Examination of human capital in terms of education, health and nutrition show that despite free services, the poor have not always benefited, leading to low education, and poor health. In turn, these are associated with lower access to well paid employment as well as reduced labour productivity. Access to physical capital is also low for the chronically poor, in terms of infrastructure provided by the state, housing and productive assets such as land and irrigation facilities. The poor are also more prone to environmental problems such as rainfall, deforestation and soil degradation, with a depressing effect on their productivity and income. The chronically poor experience financial instability associated with low wages, low skills, seasonality of employment, employment opportunities limited to hired labour, deterioration of real wages, high food expenditure ratio, high expenditure on alcohol, inadequate income support from state poverty alleviation programmes and low access to credit facilities.

Overall, the need for the government to redirect its welfare policies and programmes to more adequately assist the poor is apparent. At present the government is in the process of developing a Poverty Reduction Strategy Paper for Sri Lanka to address the issue of high levels of poverty in the country. However, certain information gaps with regard to the livelihoods of the poor and differentiation of the poor by deprivation levels for specific and effective interventions needs to be addressed. The review concludes with highlights of areas for future research on chronic poverty in Sri Lanka.

Citation

Chronic Poverty and DevelopmentPolicy in Sri Lanka: Overview Study, CPRC Working Paper No. 9, IDPM/Chronic Poverty Research Centre (CPRC), Manchester, UK, ISBN 1-904049-08-7, 55 pp.

Chronic Poverty and Development Policy in Sri Lanka: Overview Study, CPRC Working Paper No. 9,

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